As used in this article, the following words and phrases shall have the meanings given to them in this section:

“Applicant.” The term includes the following:

(1) In the case of an individual long-term care insurance policy, the person who seeks to contract for benefits.

(2) In the case of a group long-term care insurance policy, the proposed certificate holder.

“Benefit trigger.” A contractual provision in the insured's policy of long-term care insurance conditioning the payment of benefits on a determination of the insured's ability to perform activities of daily living and on cognitive impairment. For the purposes of a qualified long-term care insurance contract as defined in section 7702B of the Internal Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. § 7702B), the term shall include a determination by a licensed health care practitioner the insured is a chronically ill individual.

“Certificate.” Any certificate issued under a group long-term care insurance policy which has been delivered or issued for delivery in this Commonwealth.

“Commissioner.” The Insurance Commissioner of the Commonwealth.

“Department.” The Insurance Department of the Commonwealth.

“Functionally necessary.” The appropriateness of services directed to address the individual's inability to perform tasks required for daily living, as defined through regulation, and the individual's need for continuous care or supervision.

“Group long-term care insurance.” A long-term care insurance policy which is delivered or issued for delivery in this Commonwealth and issued to any of the following:

(1) Employers or labor organizations or a trust or to the trustees of a fund established by employers or labor organizations for employes or former employes or for members or former members of the labor organizations.

(2) Any professional, trade or occupational association for its members or former or retired members if the association:

(i) is composed of individuals, all of whom are or were actively engaged in the same profession, trade or occupation; and

(ii) has been maintained in good faith for purposes other than obtaining insurance.

(3) An association or a trust or the trustee of a fund established or maintained for the benefit of members of associations. To qualify under this paragraph:

(i) The insurer of the association or associations must file evidence with the commissioner that the association or associations have at the outset a minimum of one hundred (100) persons and have been organized and maintained in good faith for purposes other than that of obtaining insurance, have been in active existence for at least one year and have a constitution and bylaws which provide that:

(A) the association or associations hold regular meetings not less than annually to further purposes of the members;

(B) except for credit unions, the association or associations collect dues or solicit contributions from members; and

(C) the members have voting privileges and representation on the governing board and committees.

(ii) Thirty (30) days after filing, the association or associations will be deemed to satisfy organizational requirements unless the commissioner makes a finding that the association or associations do not satisfy those organizational requirements.

(4) A group other than as described in clauses (1), (2) and (3) of this section, subject to a finding by the commissioner that:

(i) the issuance of the group policy is not contrary to the best interest of the public;

(ii) the issuance of the group policy would result in economies of acquisition or administration; and

(iii) the benefits are reasonable in relation to the premiums charged.

“Independent review organization.” An organization that conducts independent reviews of long-term care benefit trigger decisions.

“Long-term care insurance.” Any insurance policy or rider advertised, marketed, offered or designed to provide comprehensive coverage for each covered person on an expense-incurred, indemnity, prepaid or other basis for functionally necessary or medically necessary diagnostic, preventive, therapeutic, rehabilitative, maintenance or personal care services provided in a setting other than an acute care unit of a hospital. The term includes a policy, rider or prepaid home health or personal care service policy. The term includes group and individual policies or riders issued by insurers, fraternal benefit societies, nonprofit health, hospital and medical service corporations, health maintenance organizations or similar organizations. The term does not include any insurance policy which is offered primarily to provide basic Medicare supplement coverage, basic hospital expense coverage, basic medical-surgical expense coverage, hospital confinement indemnity coverage, major medical expense coverage, disability income protection coverage, accident-only coverage, specified disease or specified accident coverage or limited benefit health coverage.

“Medically necessary.” The appropriateness of treatment of the insured's condition, including nonmedical support services, based on current standards of acceptable medical practice. The term may exclude benefits for care or services which are primarily for the convenience of the insured or the person's physician.

“Policy.” Any policy, contract, subscriber agreement, rider or endorsement delivered or issued for delivery in this Commonwealth by an insurer, fraternal benefit society, nonprofit health, hospital or medical service corporation, prepaid health plan, health maintenance organization or any similar organization.

“Prepaid home health or personal care service policy.” A policy, contract, subscriber agreement, rider or endorsement delivered or issued for delivery in this Commonwealth to provide home health or personal care services. This term excludes:

(1) Home health or personal care services administered through a local area agency on aging or as a government service or provided by a nonprofit association, organization or corporation other than a nonprofit health, hospital or medical service corporation.

(2) A contract or arrangement which meets all of the following criteria:

(i) Provides for services upon demand without regard to medical condition.

(ii) Does not seek or utilize any form of medical questionnaire or information, written or verbal, for assessment of health condition for any reason.

(iii) Provides for cost of services that is not based on any estimate or contingency of actual or anticipated use of services.

(iv) Does not contain any waiting period.

(v) Contains the following notice, verbatim in boldface, 18-point type on the face sheet to the contract: